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Ethan Kapstein

Topics:

Expertise

Fairer trade; inequality and growth; political economy

Bio

Ethan B. Kapstein was a visiting fellow at the Center for Global Development. He is also senior advisor for research and Arizona Centennial Chair of International Affairs at the McCain Institute for International Leadership at Arizona State University, and a senior advisor for Economics and Peace-Building at the US Institute of Peace; previously he taught at the University of Texas at Austin, INSEAD, and the University of Minnesota. Kapstein is the author or editor of seven books, the most recent of which are AIDS Drugs for All: Social Movements and Market Transformations (Cambridge University Press, with Josh Busby); The Fate of Young Democracies (Cambridge University Press, with Nathan Converse), and Economic Justice in an Unfair World (Princeton University Press). A former international banker and naval officer, Kapstein serves as an economics and strategy consultant to multinational firms and development agencies, and he has conducted economic impact studies throughout the developing world. He is a member of the Council on Foreign Relations. He can be reached at ethan.kapstein@asu.edu.

AIDS Drugs for All: Social Movements and Market Transformations, a new book by Ethan Kapstein and Joshua Busby, describes the politics and economics of the profound transformation in the market for antiretroviral (ARV) medications from “high price, low volume” to “universal access.” How did that change occur? Are there lessons for other social campaigns, such as those addressing other global health challenges, human trafficking, and climate change?

Kapstein, a professor of political science at Arizona State University, will present the key findings from the book. Jeremy Shiffman and Michele de Nevers will offer critiques and explore whether or not it’s possible to apply lessons from the international movement for universal AIDS treatment to other issues in global health and beyond.

Recent years have seen the United States embroiled in major counterinsurgency campaigns in Afghanistan and Iraq. These campaigns, of course, are only the latest in a string of such conflicts that have erupted since the end of World War II. Sharply debated at home and abroad, they raise the fundamental question of what the United States can reasonably hope to achieve in violent settings, even when its uses an array of military, political and economic instruments.

Recent setbacks in Bolivia, Venezuela, Russia, and Georgia have raised concerns about democracy's viability in developing countries. In their CGD-sponsored book, The Fate of Young Democracies, CGD visiting fellow Ethan Kapstein and co-author Nathan Converse draw on a unique data set of every democratization episode since 1960 to explore the reasons for backsliding and reversal in the world’s fledgling democracies. In a new Q&A with CGD publications coordinator John Osterman, the authors suggest ways the international community, President Obama, and Secretary of State Clinton can support young democracies.
Q: You write in the book that there's been a backlash against democracy in some places recently. What's going on?
A: In the last five years or so, we've seen setbacks in a number of young democracies, and outright reversals in several. In some countries the military has become dissatisfied with the democratic process and opted to overthrow elected governments. In others, such as Russia, Venezuela, and Bolivia, democratically elected governments have removed important institutional constraints on the chief executive, arguing that the president or prime minister needs freedom to address pressing problems.
Additional Resources
Examine the authors' data set
View Ethan Kapstein's presentation
Buy the book from Cambridge University Press
Q: Is this new?
A: We believe that it is, but it's also important to put these recent events in context. Three out of four countries that became democratic in the past 25 years are still democracies. Most young democracies enjoy wide popular support, as in Indonesia and much of Eastern Europe. In fact, democratic reversals were more common in the 1960s and 1970s than they have been since the collapse of the Soviet Union.
Q: What do the countries that suffer reversals have in common?
A: Democracies that start off in poverty are at greater risk of reversal, and poor economic performance boosts the risk that a young democracy will be overthrown. Institutional factors, too, play an important role: effective checks and balances do much to reduce the likelihood that democracy will fail. In certain cases, inequality and ethnic fragmentation can prove problematic. When leaders routinely come from one group, other groups are offended and may rebel. Leaders may shore up their power base at the expense of other groups.
Q: Yet your book says that economic performance may not be the key to stability. Why?
A: Our research confirms that good economic performance makes democracies more likely to survive. But many nascent democratic governments have been overthrown despite impressive growth. Several democracies that have suffered setbacks or outright reversals, including Venezuela, Russia, and Thailand, were enjoying economic booms. Conversely, several democracies have survived economic collapse. The discussion must go beyond economics, to also consider institutional arrangements, especially checks and balances.
Q: If effective checks and balances are key, are parliamentary systems better than presidential systems?
A: Not necessarily. Surprisingly, we find that parliamentary systems are no better than presidential systems in checking executive power. How much the legislature actually checks executive power matters more than the institutional structure. We studied formal institutions, and we think much more work needs to be done on informal institutions like a free press and civil society. Just as markets can’t function without information about prices, perhaps democracy can’t function effectively without information about government policies and their consequences.
Q: You mentioned ethnic fragmentation. How does this affect the chances of a young democracy surviving? Why have some nations been able to cohere despite such divisions and others not?
A: At first glance, it does appear that ethnic divisions pose a problem for young democracies. In the democratizations we look at, democracy was reversed 51 percent of the time in countries with above average ethnic fragmentation, compared with 38 percent in countries with below average fragmentation. One can also find numerous individual cases where it seems clear that ethnic divisions contributed to the downfall of a democratic government.
That said, in our cross-country regression, ethnic fragmentation was not significantly associated with a higher probability of reversal once we controlled for economic, institutional, and other factors. This points to another core finding: difficult initial conditions do not necessarily mean democratization is doomed. Ethnic divisions may create problems, but the right political institutions, along with policies promoting economic growth, can go a long way toward overcoming those problems.
Q: What does all this mean for foreign aid?
A: It’s a problem that economic and political programs run on separate tracks. Those who target economic growth have generally pursued “Washington Consensus” policies while those who focus on politics have emphasized assistance to parliaments and to civil society. The aid community needs to think harder about how to bring these tracks together. The U.S. Millennium Challenge Corp. (MCC) has taken a step in that direction, for example, by concentrating on land tenure and the related judicial and financial institutions that will support small-holders.
Q: How do you see the current financial crisis affecting young democracies?
A: A prolonged global crisis could challenge the world’s youngest democracies in several ways. There’s a risk that weak economic performance will lead to frustration with the democratic process and to a willingness to allow chief executives a freer hand. U.S. and European Union support may falter. And if authoritarian regimes in China and elsewhere weather the storm better than the leading democracies, some countries may be tempted to abandon the democratic path. A collapse of world trade or a retreat to protectionism also could drive these countries away from democracy. Finally, reversals in large young democracies could undermine neighboring smaller democracies, leading to a string of such failures. Against these risks, it will be vital to reinforce institutional structures associated with democratic survival.
Q: What advice would you give to President Obama and Secretary of State Clinton as they take the reins of U.S. foreign policy?
A: We would emphasize the crucial role of U.S. programs—like the MCC—that contribute to the institutional development of young democracies. International support for these governments costs little in budgetary terms but can make a huge difference. If we can support young democracies during their earliest, most difficult years, we greatly increase their chances of success.
Returns to our investments in democratic development are large. Beyond the intrinsic value of democratic freedoms, democracies are better than authoritarian regimes at providing public goods, such as education, public health, and infrastructure. In short, U.S. support for democratic institutions can contribute to a world in which more people are not only freer but more prosperous.
CGD helped to fund Kapstein’s research and manuscript preparation.

Our research on the political economy of antiretrovirals (ARVs) is motivated by a key puzzle: why were AIDS activists and AIDS policy entrepreneurs successful in putting universal access to treatment on the international agenda when so many other global campaigns--whether in health care or other issue areas like climate change--have either failed or struggled to have much impact. In our paper, we make the case that the market for ARVs was politically constructed, meaning that activists had to bring the demand and supply sides of the market together through a variety of tactics and strategies (Tim Bartley makes a similar argument on forest certification schemes).

Since 1974 the world has experienced a “third wave” of democratization. Ensuring that these new democracies consolidate is critical to both global prosperity and peace. Unfortunately, the academic literature that might help policy-makers shape appropriate foreign assistance programs remains underdeveloped, in that it lacks strong behavioral foundations, or explanations of why people act the way they do. This paper argues that the process of democratic consolidation requires a transition from clientelistic to contractual exchange relationships. Without that transition, efforts to promote democratic consolidation are unlikely to succeed.

Before a 2006 UN Special Session proclaimed there should be universal access to antiretrovirals (ARV), the life-saving drugs were far too expensive for most people with AIDS. In a new CGD working paper, Ethan Kapstein and Josh Busby examine how activists transformed ARVs from expensive private goods into so-called merit goods—products that society agrees should be accessible to all. In a related blog post they discuss the implications of their analysis for AIDS and other global challenges.

Recent years have seen the United States embroiled in major counterinsurgency campaigns in Afghanistan and Iraq. These campaigns, of course, are only the latest in a string of such conflicts that have erupted since the end of World War II. Sharply debated at home and abroad, they raise the fundamental question of what the United States can reasonably hope to achieve in violent settings, even when its uses an array of military, political and economic instruments.

Why do some young democracies fail? Drawing on a unique data set of every democratization episode since 1960, The Fate of Young Democracies explores the underlying reasons for backsliding and reversal in the world’s fledgling democracies and offers proposals for ways that the international community can help these states stay on track toward political stability.

Why do new democracies sometimes fail? This CGD brief by visiting fellow Ethan Kapstein explores the underlying reasons for frequent backsliding in the world's fledgling democracies and offers the international community recommendations for helping them stay on track toward political stability. Kapstein argues that the international community should encourage political arrangements in which government leaders are constrained by effective checks and balances, and economic policies that help to ensure that the benefits of growth are widely shared.

Pages

Recent years have seen the United States embroiled in major counterinsurgency campaigns in Afghanistan and Iraq. These campaigns, of course, are only the latest in a string of such conflicts that have erupted since the end of World War II. Sharply debated at home and abroad, they raise the fundamental question of what the United States can reasonably hope to achieve in violent settings, even when its uses an array of military, political and economic instruments.

Before a 2006 UN Special Session proclaimed there should be universal access to antiretrovirals (ARV), the life-saving drugs were far too expensive for most people with AIDS. In a new CGD working paper, Ethan Kapstein and Josh Busby examine how activists transformed ARVs from expensive private goods into so-called merit goods—products that society agrees should be accessible to all. In a related blog post they discuss the implications of their analysis for AIDS and other global challenges.

In this new working paper, CGD visiting fellow Ethan Kapstein and Nathan Converse analyze the economic performance of young democracies around the world and find that stagnating economic performance is a good indicator of imminent democratic reversal. The authors also find evidence suggesting that the design of political institutions significantly influence their probability of survival.

Since 1974 the world has experienced a “third wave” of democratization. Ensuring that these new democracies consolidate is critical to both global prosperity and peace. Unfortunately, the academic literature that might help policy-makers shape appropriate foreign assistance programs remains underdeveloped, in that it lacks strong behavioral foundations, or explanations of why people act the way they do. This paper argues that the process of democratic consolidation requires a transition from clientelistic to contractual exchange relationships. Without that transition, efforts to promote democratic consolidation are unlikely to succeed.